Nortel Networks admitted in 2003 that it had overstated profits through accounting irregularities.
The Canadian telecommunications equipment maker restated several years of financial results after an internal review and investigations by regulators. The company said accounting practices had improperly shifted expenses and revenue between reporting periods. The restatements changed previously reported profits and raised questions about executive bonuses and financial controls.
Nortel’s crisis unfolded after the collapse of the technology and telecommunications boom. In 2003, chief executive Frank Dunn and two other senior executives were dismissed. Canadian regulators later pursued allegations against former executives, although criminal proceedings did not produce convictions.
Nortel’s accounting scandal is distinct from its later bankruptcy. The company sought creditor protection in 2009, after years of financial pressure and declining competitiveness. The accounting problems damaged trust before the eventual restructuring.